Feb. 17 (Bloomberg) -- Microsoft Corp. co-founder and Chairman Bill Gates boosted his stake in Eastman Kodak Co., the camera pioneer that lost more than $4.5 billion in market value last year as it struggled to shift to digital photography.

Cascade Investment LLC, owned by Gates, bought 7.95 million shares in Kodak, raising his stake in the company to 5.2 percent, Rochester, New York-based Kodak said in a regulatory filing today. The investment would make Gates the fourth-largest shareholder in Kodak as of Dec. 31, according to Bloomberg data.

Kodak, founded in 1880, is counting on sales of digital cameras and services to replace its vanishing film business. Revenue has slumped for three years, and the company expects to lose as much as $400 million from continuing operations in 2009.

Even as sales and profit shrink, the company doesn’t plan to pursue a sale. Kodak aims to secure partners or licensing agreements this year for at least two businesses, helping defray costs, Chief Executive Officer Antonio Perez said in an interview this month.

Michael Larson, Cascade’s chief investment officer, didn’t respond to a message left by Bloomberg.

Cascade’s largest investments as of today were Canadian National Railway Co., Canada’s largest railroad; Republic Services Inc., a trash hauler in North America; and Fomento Economico Mexicano SAB, Latin America’s largest beverage company. The Kodak stake is Cascade’s ninth-largest holding by market value.

Kodak fell 11 cents, or 2.7 percent, to $3.94 at 4 p.m. in New York Stock Exchange composite trading. The shares dropped 70 percent last year.

To contact the reporter on this story: Kelly Riddell in Washington at Kriddell1@Bloomberg.net

Last Updated: February 17, 2009 16:04 EST